2013 Canadian Credit Union Report

Download 2013 Final Credit Union Report

The Eleventh Annual Analysis of Canada’s Largest Credit Unions based on 2013 Audited Financial Statements provides extensive financial comparisons between credit unions, chartered banks and financial institutions includes asset growth and profitability, deposit and loan portfolio, operating results, capital ratios. The Analysis provides an overview of the Credit Unions’ participation in the mutual fund and on-line brokerage industries.

Executive Summary

  • The 2013 report includes 121 credit unions compared to 121 credit unions last year. The 121 credit unions represent 90.4% of the total movement’s assets compared to 89.9% in the previous year.
  • The credit union system membership (not including the Caisses Populaires) has increased by 66,831 to 5,310,711 in 2013. The membership has increase in the last three years after showing small decreases in 2010 and 2009.
  • The continued consolidation of the movement* has resulted in the 10 largest credit unions accumulating assets of 77.0 billion representing 48.2% of total assets of the movement compared to $73.2 billion or 48.4% of the movement in the previous year. The 10 largest credit unions grew at 5.1% which was slower than the largest credit union’s growth of 6.3% and slower than the total movement’s growth of 5.7%.
  • The asset growth of the 121 largest credit unions slowed in 2013 to 6.3% compared to 8.1% in the previous year. The growth of the movement’s assets was 5.7% in 2012 compared to 7.1% in the previous year.
  • The number of credit unions in the system declined by 16 credit unions primarily due to mergers and amalgamations from 335 in 2011 to 319 in 2012. While, the number of branches decreased from 1,737 in 2012 to 1,733 in 2013. This is fourth year in row that the number of branches has declined.
  • The movement’s loans increased from $125.9 billion in 2012 to $135.9 billion in 2013, an increase of 5.9% compared to 8.2% in the previous year.
  • The largest credit union’s insured mortgage loan portfolio (only 42 credit unions reported these figures) , stood at $6.4 billion representing 35.5% of the residential mortgage portfolio compared to 33.2% for the large Canadian domestic banks.
  • While, deposits increased by 5.9% from $133.5 billion in 2012 to $141.4 billion in 2013, compared to an increase of 7.3% in the previous year.
  • Despite the troubles in the Canadian economy in 2013, the credit quality of the movement’s loan portfolio (as represented by the largest credit unions) remains very favourable. The allowance as a percentage of gross loans for the 121 largest credit unions decreased from 0.35% in 2012 to 0.29% in 2013. The gross impaired loans as a percentage of total loans for the largest credit unions decreased to 0.45% compared to 0.59% in the previous year.
  • Despite near historical low interest rates and increasing operating costs, the largest credit unions experienced another profitable year in 2013. The return on assets (ROA) remained at 0.62% in 2013 compared to 0.62% in 2013.
  • Net interest margin decreased from 2.63% in 2012 to 2.27% in 2013 and operating expenses as a % of average assets decreased from 2.65% in 2012 to 2.26% in 2013. The productivity expense ratio (operating expenses as a % of total operating revenue) improved to 74.1% in 2012 compared to 76.3% in 2012.
  • Credit unions rely on profitability to grow their capital. The majority of the movement’s total capital is in retained earnings. Capital ratios are affected by balance sheet growth, risk-weighting of growth, and profitability. The movement retains a portion of its annual income to satisfy its capital plans. The remainder of the net earnings are allocated to its members through the movement’s patronage program.
  • The movement returned $173.9 million to its members by way of patronage payments, which represented 20.2% of its net income in 2013 compared to 23.6% in the previous year. Total capital stood at $10.0 billion, which represented 6.91% of its assets compared to 6.67% in 2012.
  • The movement had a total BIS risk adjusted ratio declined slight to 12.63% compared to 12.77% in the previous year.

*Definition: “movement*” or” system*” in this report does not include the financial results of caisses populaires system in Quebec, Ontario, Manitoba and New Brunswick

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